Vedanta’s credit profile may weaken if Volcan draws more resources: Moody’s

Moody’s Investors Service Tuesday said the credit profile of Vedanta Resources Ltd could weaken if there is further flow of resources to its parent company Volcan Investments.

Moody’s Investors Service said in a report said that Vedanta Resources’ investment in December 2018, in a structured product issued by its parent, Volcan Investments Ltd, indicates a willingness to deploy funds to its parent that, if repeated, could weaken its credit profile.

“This willingness to deploy funds and Volcan’s probable cash-flow shortfall by March 2020, support Moody’s expectation that Volcan will likely tap on Vedanta’s liquidity again when needed,” it said.